SNAP went down about 25% today (based on FB blowback) but then reported blow out earnings with first quarterly profit and is now up 60% after hours. There are going to be a lot of investors punching walls tonight lol.

Quick Glance at the Close:

Dow - 518

SPX - 112

*Nasdaq - 538 points or 3.74%

Crude Oil: +$1.91 at $90.17

10 Year TBond: 1.827%

FB: - $85.00 or 26.4% **

* Drop of $230 Billion in value in FB.

**Biggest drop in valuation in market history!

Amazon had blowout Q4 earnings after hours which was really Smoke and Mirrors. They fell short on a lot of categories. However, they beat EPS because of the Rivian IPO, which probably wasn't forecasted. 83% of their Q4 earnings was from that IPO as they had a huge early stake in Rivian.

AMZN is hiking their annual PRIME membership fee by 17% to offset higher costs for shipping and wages.
Going from $119 to $139 starting Feb. 18th. - - - It was increased from $99 to $119 four years ago.

Operational disruptions, lost productivity and inflationary pressures contributed to more than $4 Billion in costs during Q4.

They did grow their ad revenue by 32% to $9.7 Billion.
They also saw a 40% rise in revenue from their web services (AWS) to $17.8 Billion.

The stock is up $408 in after-hours trading to $ 3,185.00
+ 15%

In other words, AMZN has pricing power.

With margins getting impacted by inflation, companies like AMZN have not only shown growth, but PRICING POWER.

That's very important in this kind of environment.

Pre-Opening:

Nasday futures are -107
SPX futures are - 26

Crude oil soaring to $92 and the Yield on the 10 Year is spiking to new highs for the move.

1.912%

CPI highest since 1982. Inflation higher than expected. This is dropping the NASDAQ today.

oski003 said:

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CPI highest since 1982. Inflation higher than expected. This is dropping the NASDAQ today.

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The U.S. Treasury 10-2 spread has dropped to 52 points (a negative number is an indicator of an economic slowdown for economists. For people playing politics, it may mean other things). The market view that the Fed will trigger a recession is growing.

CPI at 7.5%

Consensus was 7.3%

December's YoY increase was 7.0%

Core CPI (excluding food and energy) rose by 6.0%

Core CPI in December was + 5.5%

Next CPI release is March 10, just days before the Fed meets.

The average household is spending an extra $250 a month, or $3,000 per year, due to high inflation but middle-aged Americans are paying even more (yahoo.com)

US Treasury Yield Curve

10 year yield now trading 2.01 % today

Mr. Market did a great job of rallying back from the opening low, but bond yields are unrelenting and continuing to push higher. Now pushing 2.04%

Meanwhile, St. Louis Fed Bank President James Bullard now wants to see a rate hike of 100 basis pts by JULY.

The S&P 500 rallied back from being down 52 points on the opening to being down only 2 points just a little over an hour into the session.

But bond yields kept pushing higher and the rally faded, with sellers taking control from about 9:45 AM on.

SPX closes down 83 points or 1.8% to 4504.

NAZ off 304 points or 2.1%

DOW off 526 points or 1.5% (strength in DIS)

The Bulls need to hold last Friday's lows at 4451 otherwise Mr. Market is heading for a re-test of the JAN lows.

SPX down another 85 points

NAZ down 394 points

DOW - 503

Crude Oil +$4.00 to $93.90 which is a new high for the move.

10 year yield down to 1.95 after pushing 2.04 yesterday.
Flight to quality today and the yield curve continues to FLATTEN.

2 year / 10 year spread is now down to .468

Gold + $22 to $1859

This thread doesnt seem very popular.

Guess no one here has any money in the equity market.

The market goes up, the market goes down.

Generally it goes up more than down.

As long as the Big Money keeps investing in it then it will be a safe play because they hate to lose money and will lobby everyone it takes to keep making money.

The rest of us are along for the ride.

dimitrig said:

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The market goes up, the market goes down.

Generally it goes up more than down.

As long as the Big Money keeps investing in it then it will be a safe play because they hate to lose money and will lobby everyone it takes to keep making money.

The rest of us are along for the ride.

---

A pretty big oversimplification on your part.
And the "market" could care less about someone or group, LOBBYING for higher prices.

Especially at this juncture, given where the 10 year yield is and where monetary policy is heading. In case you havent noticed, the Big Money has been getting crushed and technical support levels have been non-existent. And....the FED doesnt care.

Back to back - 85 point days in the S&P 500 is not "normal". This is not the time to be complacent.

DiabloWags said:

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dimitrig said:

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The market goes up, the market goes down.

Generally it goes up more than down.

As long as the Big Money keeps investing in it then it will be a safe play because they hate to lose money and will lobby everyone it takes to keep making money.

The rest of us are along for the ride.

---

A pretty big oversimplification on your part.
And the "market" could care less about someone or group, LOBBYING for higher prices.

Especially at this juncture, given where the 10 year yield is and where monetary policy is heading. In case you havent noticed, the Big Money has been getting crushed and technical support levels have been non-existent. And....the FED doesnt care.

Back to back - 85 point days in the S&P 500 is not "normal". This is not the time to be complacent.

---

I disagree.

The market cares a lot about what the big money wants, because they can manipulate it. Maybe not at a micro level, but at a macro level they definitely can and do.

Given how much the market rose artificially because of the Republican tax cuts and the bipartisan stimulus most of us can afford to take a pretty big haircut and still be way out in front.

I know I can.

What exactly are you worried about? Are you planning on retiring in 2023?

If not and if you're not a trader who makes your living on razor thin margins then who cares?

Easy come, easy go.

The markets can drop 50% tomorrow and it won't rattle me.

Maybe you can explain why this seems disconcerting to you.

dimitrig said:

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The market goes up, the market goes down.

Generally it goes up more than down.

As long as the Big Money keeps investing in it then it will be a safe play because they hate to lose money and will lobby everyone it takes to keep making money.

The rest of us are along for the ride.

---

This is basically the game, with the banking dominated Fed making sure the investing class is happy.

DiabloWags said:

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dimitrig said:

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The market goes up, the market goes down.

Generally it goes up more than down.

As long as the Big Money keeps investing in it then it will be a safe play because they hate to lose money and will lobby everyone it takes to keep making money.

The rest of us are along for the ride.

---

A pretty big oversimplification on your part.
And the "market" could care less about someone or group, LOBBYING for higher prices.

Especially at this juncture, given where the 10 year yield is and where monetary policy is heading. In case you havent noticed, the Big Money has been getting crushed and technical support levels have been non-existent. And....the FED doesnt care.

Back to back - 85 point days in the S&P 500 is not "normal". This is not the time to be complacent.

---

The S&P 500 is still up 12% from this time last year. And 88% from 5 years ago.

dajo9 said:

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The S&P 500 is still up 12% from this time last year. And 88% from 5 years ago.

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Another oversimplification.

Most growth names have been cut in half over the last 12 months. And if youre the typical American who has their money in a 60/40 "balanced" portfolio as recommended by their financial advisor youre getting hammered on both sides of the allocation coin.

This should be obvious.

dimitrig said:

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I disagree.

The market cares a lot about what the big money wants, because they can manipulate it. Maybe not at a micro level, but at a macro level they can and definitely do.

---

You act as though the market cares about what Congress does. And your "manipulation" thesis sounds like it came from the Q Anon crowd.

That's not what drives the market.
LIQUIDITY drives stock prices.

"Big Money" doesnt have the "say" that you think it does. The only thing "Big Money" does is FOLLOW LIQUIDITY.

And right now that LIQUIDITY is being removed.

dimitrig said:

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Easy come, easy go.

The markets can drop 50% tomorrow and it won't rattle me.

---

Doesnt sound like you have much money at risk so its not an issue for you. Perhaps that's the case for most here at Bearinsider; hence the lack of interest in this thread.

DiabloWags said:

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dimitrig said:

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Easy come, easy go.

The markets can drop 50% tomorrow and it won't rattle me.

---

Doesnt sound like you have much money at risk so its not an issue for you. Perhaps that's the case for most here at Bearinsider; hence the lack of interest in this thread.

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Or maybe we just care to discuss it with you!

calpoly said:

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DiabloWags said:

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dimitrig said:

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Easy come, easy go.

The markets can drop 50% tomorrow and it won't rattle me.

---

Doesnt sound like you have much money at risk so its not an issue for you. Perhaps that's the case for most here at Bearinsider; hence the lack of interest in this thread.

---

Or maybe we just care to discuss it with you!

---

Or maybe English is a second language.
And an education at Cal Poly isnt worth much.

Market taking another dive today. Thanks Putin.

I focus on VTI because it's so broad based but and it's *only* down 10% from all time highs. I was looking for 20-30% drop before adding more, so still feels premature. Obviously if I look at it on a sector basis, there are much bigger dropoffs (tech is off ~20% from ATHs).


@DiabloWags - please let me know when to catch a falling knife lol.

Unit2Sucks said:

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Market taking another dive today. Thanks Putin.

I focus on VTI because it's so broad based but and it's *only* down 10% from all time highs. I was looking for 20-30% drop before adding more, so still feels premature. Obviously if I look at it on a sector basis, there are much bigger dropoffs (tech is off ~20% from ATHs).


@DiabloWags - please let me know when to catch a falling knife lol.

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You didn't ask me but I wouldn't increase equity exposure as long as the Fed continues to signal reduction of liquidity (higher rates and / or quantitative tightening). This is the Fed's market right now.

Unit2Sucks said:

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Market taking another dive today. Thanks Putin.

I focus on VTI because it's so broad based but and it's *only* down 10% from all time highs. I was looking for 20-30% drop before adding more, so still feels premature. Obviously if I look at it on a sector basis, there are much bigger dropoffs (tech is off ~20% from ATHs).


@DiabloWags - please let me know when to catch a falling knife lol.

---

There's a big battle going on here given several risks in the market.
The biggest one being the FED.

But I'm not so much concerned about the 6 or 7 interest rate hikes that the market is anticipating by the FED, as much as I am worried about what they do with their balance sheet. To me, that is the biggest risk.

(Contrary to popular opinion, the FED does not come swooping in to support the equity market. Their primary concern, is the smooth flow of credit. When credit markets get illiquid and start to freeze-up, the FED gets involved)

In the meantime, the 10 biggest stock repurchases for S&P 500 companies totaled $86 Billion last quarter, which is up 30% from a year earlier. This is clearly a tailwind as stocks sputter due to mounting geopolitical tensions and fears that the Fed tightening will dent earnings growth. - - - $54 Billion was spent just by Apple, Meta, and Alphabet alone in Q4. They clearly have the cash flows to do this.

On another note, one of the biggest sector declines that I've seen is in the Medical Diagnostics area. We're talking cancer screening with specialty labs like ADPT, CSTL, EXAS, GH, ILMN, NTRA, etc. This sector alone is down 50 - 60% since last June, given the ROTATION out of growth names, and into value names due the change in the Fed's monetary policy. There have also been some "headwinds" impacting this sector due to Covid.

Unit2, you can never catch the bottom.
And even though I could eventually see the S&P testing 4000, at the end of the day it's a market of stocks and not a stock market.

If you find growth names that are trading in or near single digit price to sales multiples with management teams that have shown the ability to execute. this becomes a great opportunity!

But if you wish to remain diversified (to an extent), the VTI is probably a good choice.

DiabloWags said:

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Unit2Sucks said:

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Market taking another dive today. Thanks Putin.

I focus on VTI because it's so broad based but and it's *only* down 10% from all time highs. I was looking for 20-30% drop before adding more, so still feels premature. Obviously if I look at it on a sector basis, there are much bigger dropoffs (tech is off ~20% from ATHs).


@DiabloWags - please let me know when to catch a falling knife lol.

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Unit2, you can never catch the bottom.

---

I did in March 2009, sort of. I bought on the way down and made my last purchase at the absolute trough. I am not hoping to catch the bottom here, but looking for a steeper decline before I start deploying. I still think the market is overcooked so I'm looking for VTI to go back under $200 (vs ATH of ~240) before it becomes interesting to me again.

@dajo - I hear you on the impact of the fed as well.

Unit2Sucks said:

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DiabloWags said:

---

Unit2Sucks said:

---

Market taking another dive today. Thanks Putin.

I focus on VTI because it's so broad based but and it's *only* down 10% from all time highs. I was looking for 20-30% drop before adding more, so still feels premature. Obviously if I look at it on a sector basis, there are much bigger dropoffs (tech is off ~20% from ATHs).


@DiabloWags - please let me know when to catch a falling knife lol.

---

Unit2, you can never catch the bottom.

---

I did in March 2009, sort of. I bought on the way down and made my last purchase at the absolute trough. I am not hoping to catch the bottom here, but looking for a steeper decline before I start deploying. I still think the market is overcooked so I'm looking for VTI to go back under $200 (vs ATH of ~240) before it becomes interesting to me again.

@dajo - I hear you on the impact of the fed as well.

---

I caught the bottom in 2009 (with very small dollars) and 2020. In 2009, I was looking for psychological signs that we had hit the bottom. I accidentally saw Jim Cramer on Mad Money carrying around a picture of Vladimir Lenin and saying Obama had destroyed more capital than anybody since Lenin. I took that as my sign and bought. The market bottomed that week.

In 2020, once the Fed announced they were supercharging quantitative easing I decided I would get back in after the market had two consecutive up days. I bought back in 2 days after the bottom. I took this strategy from lessons learned from the 2009 crash. In 2009 the market also rebounded shortly after the Fed started QE. I wouldn't be surprised to see a similar trajectory this time around, but you never know.

As for the FED, I think it's entirely possible that they became reactive as opposed to proactive given that our country has racked up a record $30 Trillion in public debt - - - up about 30% since early 2020. This means that even rates topping out around 2% translate to an extra $600 BILLION a year in interest owed, which effects future spending.

It's quite possible that this reality is the reason why the FED was initially so dismissive towards inflation and calling it transitory. - - - Manage inflation expectations, move the target, and hope inflation cools, seems to have been the logic. If people and business owners didnt believe that price inflation would stick, then maybe it wouldnt.

Sadly, it did stick.
Gallup shows 8 out of 10 Americans expect inflation to rise.
And now the FED is terribly behind the curve.

The U.S. Treasury 10-2 spread took another big dump today dropping down to .39. The Treasury market is telling us that going forward, inflation is not the problem - slow growth is.

dajo9 said:

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The U.S. Treasury 10-2 spread took another big dump today dropping down to .39. The Treasury market is telling us that going forward, inflation is not the problem - slow growth is.

---

You dont think that there might be a flight to quality occurring that is flattening the curve given that Russia just invaded Ukraine?

dajo9 said:

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I caught the bottom in 2009 (with very small dollars) and 2020. In 2009, I was looking for psychological signs that we had hit the bottom. I accidentally saw Jim Cramer on Mad Money carrying around a picture of Vladimir Lenin and saying Obama had destroyed more capital than anybody since Lenin. I took that as my sign and bought. The market bottomed that week.

.

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I would suggest that it would be most valuable if you were to provide some context when it came to those remarks made by Jim Cramer (March of 2009) who by the way, voted for Obama.

Cramer was clearly concerned about Obama raising taxes and being unaware of the possibility that the U.S. was heading for a second Great Depression. At the time, Cramer was critical of many people, including FED Chairman Ben Bernanke (and St. Louis Fed President Bill Poole) for not responding to the crisis more quickly. His infamous You Tube rant (posted below) about "They Know NOTHING!" was pretty accurate given the run on banks at the time. There was clearly a liquidity crisis.

As I recall, President Obama was also criticizing the Banks at the time. I believe that someone like George Soros or Larry Summers must have taken him out to lunch and told him to stop doing that, given that it was counterproductive and that HE WOULD NEED THE BANKS TO GET OUT OF THE RECESSION.

The reason I state this, is because Obama wound up doing a complete 180 degree turn and his sentiment towards the Banks wound up changing dramatically.


Cramer - They Know Nothing!!! - YouTube

DiabloWags said:

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dajo9 said:

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The U.S. Treasury 10-2 spread took another big dump today dropping down to .39. The Treasury market is telling us that going forward, inflation is not the problem - slow growth is.

---

You dont think that there might be a flight to quality occurring that is flattening the curve given that Russia just invaded Ukraine?

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Well the 10-2 spread has halved in the last month but if you want to attribute the move today solely to Ukraine, then ok. Just remember that a flight to quality from war in Ukraine is also a slow growth argument.

DiabloWags said:

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dajo9 said:

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I caught the bottom in 2009 (with very small dollars) and 2020. In 2009, I was looking for psychological signs that we had hit the bottom. I accidentally saw Jim Cramer on Mad Money carrying around a picture of Vladimir Lenin and saying Obama had destroyed more capital than anybody since Lenin. I took that as my sign and bought. The market bottomed that week.

.

---

I would suggest that it would be most valuable if you were to provide some context when it came to those remarks made by Jim Cramer (March of 2009) who by the way, voted for Obama.

Cramer was clearly concerned about Obama raising taxes and being unaware of the possibility that the U.S. was heading for a second Great Depression. At the time, Cramer was critical of many people, including FED Chairman Ben Bernanke (and St. Louis Fed President Bill Poole) for not responding to the crisis more quickly. His infamous You Tube rant (posted below) about "They Know NOTHING!" was pretty accurate given the run on banks at the time. There was clearly a liquidity crisis.

As I recall, President Obama was also criticizing the Banks at the time. I believe that someone like George Soros or Larry Summers must have taken him out to lunch and told him to stop doing that, given that it was counterproductive and that HE WOULD NEED THE BANKS TO GET OUT OF THE RECESSION.

The reason I state this, is because Obama wound up doing a complete 180 degree turn and his sentiment towards the Banks wound up changing dramatically.


Cramer - They Know Nothing!!! - YouTube

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Cramer's rant was in August 2007. Bush bailed out the banks in 2008. We're talking about the market bottom in March 2009. I'm sorry you and Cramer feel like Obama was being mean to the banks.